Investment trusts beat cash over 100% of ten-year periods during last 30 years
Our data demonstrates the power of stock market investing.
With a reported £46 billion sitting in nearly 6.9 million cash ISAs paying interest rates of 1.5% or less1, it’s clear that millions are seeing their savings whittled away by inflation.
To demonstrate the power of stock market investing, the Association of Investment Companies (AIC) has compared the returns on cash savings accounts with the returns of the average investment trust.
Investing in the stock market is often seen as risky but over the long term, it has protected savings from inflation a lot more effectively than cash.
Nick Britton, Research Director of the Association of Investment Companies (AIC)
Using data going back to 19962, the AIC found that the average investment trust outperformed savings accounts in 67% of one-year periods, 84% of three-year periods, 95% of five-year periods and 100% of ten-year periods.
Investment trusts versus cash savings
1 year | 3 years | 5 years | 10 years | |
|---|---|---|---|---|
| Number of periods* | 346 | 321 | 297 | 237 |
| Number of periods in which the average investment trust beat cash savings | 233 | 270 | 281 | 237 |
| % of periods in which the average investment trust beat cash savings | 67% | 84% | 95% | 100% |
Source: theaic.co.uk / Morningstar. Average investment trust returns are size-weighted averages excluding VCTs. Cash returns are based on Morningstar UK Savings 25000+ Investment index which is the average return of savings accounts open to those with at least £25,000 to invest and requiring up to 90 days’ notice for withdrawals. *Rolling periods, each ending in a month end, from 01/01/1996 to 31/08/2025.
Nick Britton, Research Director of the Association of Investment Companies (AIC), said: “Investing in the stock market is often seen as risky but over the long term, it has protected savings from inflation a lot more effectively than cash. Since 1996, there hasn’t been a single ten-year period in which the average investment trust has done worse than cash. The best ten-year return for trusts in that period is 217% and the worst is 55%, which is still better than the best ten-year return for cash of 39%.
“Of course, past performance is no guide to the future, and our data shows that the chances of losing money over a one-year period have been much higher – about one in three. Investment trusts should be considered by those who can invest for at least five years, and preferably ten or longer, and if you’re in doubt about whether investment trusts might be suitable for you, you should consult a financial adviser.”
- ENDS -
Follow us on X @AICPRESS
Notes to editors
- Source: Moneyweek, ‘Millions of cash ISA savers are missing out on hundreds of pounds’.
- Morningstar’s investment trust performance data, which is the source for this analysis, goes back to 1 January 1996.
- The Association of Investment Companies (AIC) represents a broad range of investment trusts and VCTs, collectively known as investment companies. The AIC’s vision is for closed-ended investment companies to be understood and considered by every investor. The AIC has 294 members and the industry has total assets of approximately £267 billion.
- For more information about the AIC and investment trusts, visit the AIC’s website.
- Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
